Understanding Short-Time Work & KAE Benefits#
Contractual working hours are temporarily scaled down or halted. Swiss unemployment insurance reimburses 80% of verifiable income loss up to the statutory ceiling of CHF 148,200 per year. Employers advance compensation through regular payroll cycles.
Mandatory Written Employee Consent#
Swiss employers cannot impose short-time work unilaterally. Each worker must provide written agreement or dissent. Refusing entitles you to 100% salary under Art. 324 CO, though employers retain ordinary termination rights under economic hardship.
Preservation of Annual Leave and 13th Month Pay#
Holiday quotas cannot be curtailed due to short-time work. Days taken as leave during reduced schedules, as well as statutory public holidays, are remunerated at 100% full wage. 13th-month salary allowances are factored into KAE calculations.
Social Security and Occupational Pension (BVG) Continuity#
Mandatory social contributions (AHV/IV/EO/ALV) and occupational pension fund premiums (Pillar 2) must continue unabated on the original 100% gross salary baseline, preserving pension accruals.
Interim Employment During Reduced Schedules#
Employees on short-time work may undertake temporary secondary employment provided earnings are reported to the competent unemployment fund and primary contractual loyalties are respected.
How it works in practice: registration, advance notice, settlement#
Short-time work is a procedure with deadlines, and the obligations lie with the employer. For employees an overview is still worthwhile, because most disputes arise from the procedure and not from the amount of compensation.
- Advance notice. The employer registers the short-time work with the competent cantonal labour market office and gives reasons for the loss of work. Without registration no entitlement arises.
- Consent of the workforce. Introducing short-time work requires the consent of the employees concerned or, where one exists, a provision in the collective employment agreement (GAV).
- Settlement. The employer pays the salary on the usual date and settles the shortfall monthly with the unemployment fund. The short-time work compensation is paid to the employer retrospectively.
- Notification duties. Interim earnings, illness and holidays during short-time work must be reported because they change the compensation.
Check your payslip particularly carefully in short-time work months: the shortfall must be shown separately, and the social insurance deductions must be based on the full salary.
Five points you should check when short-time work is ordered#
Short-time work is not a legal entitlement of the employer but an agreement. Five points belong on the table before you sign:
- A written basis. Duration, departments affected, extent of the shortfall – agreed orally is not enforceable.
- Top-up. Does the employer pay the difference between 80 % short-time work compensation and the full salary? A GAV or staff regulations may provide for this.
- Holidays and public holidays. Both are paid at 100 % and must not fall under short-time work.
- Pension fund and AHV. Contributions continue on the basis of the full salary; the employer bears the employee share on the shortfall amount.
- Return and termination. How and when does the short-time work end, and what applies if notice is given during it? From the point of termination there is no further entitlement to short-time work compensation, and the salary is owed in full.
Anyone who declines short-time work keeps the entitlement to the full salary – but bears the risk that the company gives notice with the ordinary period in an emergency.